Hard Money Loans – How Long?
Thursday, October 05, 2006
Now that you’ve decided upon a hard money loan, how long will the term be?
A frequent question, especially in the hard money arena. As with any loan, length of the loan is highly influential, affecting payment size, interest rates, and how long you will be tied down by the loan. Therefore, consider the following facts about hard money loan terms and lengths.
As a general rule, hard money loans are short to intermediate in length. Since they’re used for everything from cars to airports, however, the term length obviously varies, depending on the lender and the loan. As a rule of thumb, most hard money loans will wind up somewhere between one and six years, with the usual length around three years. Normally, the payments include some interest and principal, but eventually there will probably be some sort of balloon payment owed. And that’s where borrowers can run into trouble.
But some private lenders offer longer hard money loans. In fact, in some cases a hard money loan can be like a mortgage. The larger private money lenders can often make such loans, including those in the league of Kennedy Funding, doing business for over 20 years, and specializing in fast commercial bridge loans between $1 million and $100 million or more, and deliverable in days, as opposed to weeks or months from conservative, traditional bank-oriented institutions. Always choose your private lender wisely, and you will be worlds better off.
A frequent question, especially in the hard money arena. As with any loan, length of the loan is highly influential, affecting payment size, interest rates, and how long you will be tied down by the loan. Therefore, consider the following facts about hard money loan terms and lengths.
As a general rule, hard money loans are short to intermediate in length. Since they’re used for everything from cars to airports, however, the term length obviously varies, depending on the lender and the loan. As a rule of thumb, most hard money loans will wind up somewhere between one and six years, with the usual length around three years. Normally, the payments include some interest and principal, but eventually there will probably be some sort of balloon payment owed. And that’s where borrowers can run into trouble.
But some private lenders offer longer hard money loans. In fact, in some cases a hard money loan can be like a mortgage. The larger private money lenders can often make such loans, including those in the league of Kennedy Funding, doing business for over 20 years, and specializing in fast commercial bridge loans between $1 million and $100 million or more, and deliverable in days, as opposed to weeks or months from conservative, traditional bank-oriented institutions. Always choose your private lender wisely, and you will be worlds better off.
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